I believe that we are forever in a whole new real estate realm, in Toronto. I’m not entirely convinced that we can look back at past markets to fully predict what the future holds for us.
I do suspect that down markets will always have a number of sales that are very strong as a certain demand will always exist. That being said it may be a niche aspect of the market. There are always buyers looking for a very particular product.
The product that will move and move well in a down market: 1) for those buyers who must live on a certain street, perhaps in an ultra exclusive neighbourhood or the street where they grew up; 2) the house that they have always dreamt of; 3) the sprawling hard loft that you only see come up ever dozen or so years has come to market…the list could go on and on.
Now you may be wondering how the above would be any different than in the past market slumps. Well, let me explain. The last market drop we had was in the late 1980s. This was before we had cell phones, oh by the way those “briefcase cell phones” don’t count here…and who is kidding who, did you have one? Did you know of anyone who had one? If your client was cutting edge enough to have a voicemail machine that recorded on a tape, well then you were in luck! You would leave a message to call back. The Real Estate business took time. Buying a house took time. Selling a house took time. Patience was a virtue. There were many “hurdles” back then, ones that are so hard to imagine today with the ability to access anything at the swipe or tap of a finger.
In the past Realtors would go to the office (normally from 9-5 on weekdays), await the delivery man from the Toronto Real Estate Board. Once this delivery arrived it would be a free for all amongst the Realtors…to grab what were called “Real Estate Tear Sheets”. What are these you may be asking? These were literally booklets filled with the previous day’s listings. The Realtors would scramble to tear them from the books and proceed to review what listings looked good (based on a single black and white picture, price and lot dimensions…basically). If there was a good listing then the Realtor would call their clients on a land line. There was no way these agents had the ability to be on top of all the neighbourhoods of the city.
Let me quickly touch on the elapsed timeframe of what it would have been like being an Agent in the last market slump:
9am: Real Estate Agent arrives at office.
9:15am: TREB delivers tear sheets.
9:20am: Agent gets in line to tear a sheet.
9:40am: Chooses which property that was launched the day before is best for their client.
9:50am: Agent finds nearest rotary dial phone to call client at their personal residence.
9:56am: Agent thanks other agent for kindly getting off that rotary phone after calling their mother.
9:57am: Agent begins to spin the dial.
10:01am: Agent watches the last number on the dial spin back to it’s resting point. Phone finally connects and begins to ring.
10:02am: Client doesn’t answer as they work for a living.
10:04am: After listening to a crackling recording that may or may not be the client’s dog of child, the answering machine beeps. You now have approximately 30 seconds to leave a message before the tape cuts the message off.
10:05am: Agent waits.
…Time passes…
5:00pm: Agent still waiting, decides to go home.
6:00pm: Client gets home from work and checks tape recordings. Calls Agent’s office (because beepers aren’t common, yet). Hopefully to say that they love this house! But maybe not, which would mean back to the drawing board…tomorrow. But for this example let’s say that the clients “love this house”…
Agent returns to work the next day to see a message on a note pad. Agent to return call…return to the above “9:50am” and hit repeat…
I hope you are getting my point here. Everything took time. Way more time!
We haven’t seen a down market since the late 1980s. The 1990s were slower and more balanced but flat. The 90s was a time when the internet began to pop up in homes, but really, that was the late 1990s, and we all know it made lots of noise at it dialled into your TelCo! It was very slow. Oh, and the Toronto Real Estate Board and CREA did not have an advertising tool for you to look up listings. You still had to wait…for your agent! (see above rigmarole if you would like to repeat the agony)
Now fast forward to the massive leaps in technology we have seen. Even in the last 5 years. Everyone is online. Social Media spreads messages faster than we could forward an email with a funny joke back in the late 90s. Those pesky rotary dial phones are long gone, pagers came and went (I wasn’t the Pager King but I did own three over the years), brick phones came and went, then flip phones, now we have “smart” phones which are with us all the time. We are fully accessible.
Houses no longer stand a chance of sitting around without getting a lot of attention. We know when your favourite house on your favourite street pops up. We have special alerts that we can set up for this very purpose. You can be notified instantly.
With this instant access marketplace it is very, very difficult to imagine seeing a full halt in the market followed by a large drop. People are always looking to buy. The difference now is there is no communication or marketing hurdle. I don’t see a snowball effect happening with the advent of modern tech.
The internet has changed how we do everything. The Real Estate market is no different. I believe that the internet has filled a gap in time that would have allowed properties to sit for much longer than they otherwise would have.
(after writing this daily real estate musing I have realized that I could write a full paper on this…I’m just touching the surface here, but listings are already popping up and it’s now 8:04am)
